Al Amin :
The National Board of Revenue (NBR) is currently exploring avenues to bolster its Value-Added Tax (VAT) earnings, crucial for meeting revenue collection targets. To achieve this objective, the NBR is focusing on the installation of electronic fiscal devices (EFDs) at retail levels.
Despite efforts to enhance VAT collection through electronic devices, the tax authority has observed that revenues generated from these devices fall short of expectations. Consequently, there is a significant opportunity to augment indirect tax revenues by expanding the coverage of businesses operating under the EFD net.
In March, the government agency collected only Tk 33.58 crore from 9746 EFD machines installed nationwide. This figure underscores the need for intensified efforts to increase VAT collection through electronic means.
In response to the sluggish pace of EFD machine installation and the resultant revenue shortfall, NBR Chairman Abu Hena Md Rahmatul Muneem has urged concerned officials to devise strategies for enhancing tax collection from this sector.
Besides, the International Monetary Fund (IMF) is pressuring the revenue board to withdraw the existing tax exemption from various sectors and the condition should be reflected from the upcoming national budget for the fiscal year 2024-25.
As per the IMF loan condition, the tax administration will have to withdraw all existing tax exemptions in three phases by July 1, 2027 to increase revenue collection.
The lending agency has also given conditions to cancel the power of the NBR to grant tax exemption to any person or organization from the next fiscal year.
The IMF has also asked the tax authority to prepare a mega plan in line with increasing the tax revenue.
In the mega plan, the NBR has declared that it would strengthen the EFD machines installation activities across the country to increase revenue collection.
Moinul Khan, Member for VAT implementation and IT of the NBR, said “Now, the tax administration is getting around Tk 50,000 a month from each shop using the device. But, before the introduction of EFDs, monthly VAT receipts were Tk 4,000-Tk 5,000 from each shop.”
The tax collector has installed about 18,000 EFDs at the retail level to bring transparency in VAT collection, he said. In August 2020, the NBR began installing the devices and initially installed 100 EFDs at stores and businesses in Dhaka and Chattogram.
It plans to set up 60,000 more EFDs this fiscal year ending in June and another 3 lakh in the next five years.
Prof Dr Mustafizur Rahman, Distinguished Fellow of the Centre for Policy Dialogue (CPD), suggested a nationwide awareness campaign to instill a sense of civic duty in citizens as regards paying VAT.
“The target of installing three lakh EFDs over the next few years must be reached, backed by proper planning,” he said. A time-bound plan should be put in place to bring all eligible VAT-collecting points under the net.
“Payment must be monitored rigorously, and enforcement strengthened. NBR’s required human resources will need to be ensured to carry out these tasks,” he added.
